The UK's new car market is experiencing a surge in electric vehicle (EV) sales, with July 2026 marking the strongest month for new car registrations since the pandemic. This growth is primarily driven by the increasing popularity of hybrid, plug-in hybrid, and electric cars, which accounted for over a quarter of all new car sales so far this year. The rise in EV sales can be attributed to several factors, including the government's Electric Car Grant and the discounting of EVs, as well as the recent increase in petrol and diesel fuel prices due to the Iran war. These factors have likely influenced buyers to opt for more environmentally friendly alternatives.
The market share of petrol cars, which have been the predominant choice for UK buyers, has fallen from 47.3% in July 2025 to 40.1% in July 2026. This shift towards electrified cars is significant, with pure-petrol car registrations declining by 5.2% and now accounting for less than half of all new car sales. The best-selling car in July was the Ford Puma, followed by the Nissan Qashqai and Kia Sportage, while the Renault 5 was the top-selling EV.
However, the SMMT's chief, Mike Hawes, warns that this growth cannot be sustained. He argues that car manufacturers are losing billions by heavily discounting their EVs to meet the ZEV mandate targets. The ZEV mandate, which aims to achieve a 33% target for EV sales by 2026, has been a subject of debate, with some suggesting that the credit-banking and credit-trading flexibilities built into the scheme may be overestimated. New Automotive, an EV-focused transport research organisation, estimates a real target of 24.6%, and the current market share stands at 25.3%.
The success of Chinese newcomer Jaecoo in the top 10 best-sellers is notable, with its 5 and 7 SUV models scoring impressive registrations. This trend highlights the growing global interest in electric vehicles and the potential for international competition in the market.
In conclusion, the UK's new car market is undergoing a significant transformation, with electric vehicles gaining popularity and market share. While the government's incentives and the shift in consumer behavior are driving this change, there are concerns about the sustainability of the growth and the potential challenges in meeting the ZEV mandate targets. As the UK approaches its 2035 deadline for sales of new ICE cars, the future of the automotive industry and its environmental impact will be closely watched.
